How Did the Top 5 Cryptocurrencies Perform in 2019?
What happened to the 5 major cryptocurrencies over the past year? Here we look at major developments for Bitcoin, Ether, Litecoin, Ripple and Bitcoin Cash in 2019 and hint at what 2020 may hold.
Bitcoin (BTC)
In many ways, 2019 was seen as a flat year for start-up CEOs and the wider blockchain community as the technology seemed to enter Gartner’s ‘trough of disillusionment’. Yet, as far as the cryptocurrency markets were concerned, Bitcoin actually started off well. There were major gains during the first six months with BTC rising strongly from its January price of $4,000 up to $14,000 in late June 2019, based on CoinDesk data. Bitcoin eventually finished the first half of the year at $11,139.22, returning rewards of 202% in that period.
Commentators have speculated on a variety of factors which drove confidence in Bitcoin in the first half of last year including its acceptance by major corporations like AT&T, additional publicity being driven to cryptocurrency more broadly by Facebook’s launch of the Libra project in June 2019, which included membership from multiple major multinational companies, as well as greater interest in Bitcoin from institutional investors.
In the second half of 2019, however, the picture was not quite so rosy, and by November 2019, the BTC price had declined more than 50% from its midyear 2019 high. The drop in trading volume and price occurred despite 2 pieces of news that might have been expected to raise confidence in Bitcoin such as the introduction of Bakkt offering futures contracts and institutional players such as Fidelity entering the market.
Analysts are now attempting to assess the potential impact of Bitcoin’s next ‘’halving” event, which is due to take place in May 2020. Halving refers to a 50% cut in the reward paid to Bitcoin miners (now mostly large companies running banks of supercomputers that allow new Bitcoins to be created). The current reward of 12.5 BTC will be cut in half in May this year, falling to 6.25 BTC. Halving events have previously been considered bullish for Bitcoin, leading to price gains following past halving events in 2012 and 2016.
Whatever happens to Bitcoin this year, the overall price of Bitcoin tends to be a signal for confidence in the rest of the cryptocurrency market — so it is worth considering that when Bitcoin goes up, other cryptocurrency prices tend to rise accordingly.
Ether (ETH)
July 2019 saw the 5th anniversary of the Ethereum network whose first coins were sold in a crowdsale in July 2014. Although the Ethereum networks remain one of the most popular platforms for enterprise blockchain solutions and for the creation of decentralized applications, many technical experts were frustrated with the pace of technical development of the Ethereum network in 2019.
Towards the end of the year, the network implemented a so-called ‘hard fork’ known as Istanbul which allowed a number of improvements to be made to its blockchain ahead of a further set of developments known as Serenity Phase 0 planned for early 2020.
In terms of the price of Ether (the native cryptocurrency of the Ethereum network), prices were generally suppressed for most of 2019 apart from a brief high in June 2019 when the price rose to around $300. By November 2019, one ETH was worth around $150 in November 2019 compared to a high of $1100 in January 2018.
According to the data published by Statista, Ether is now the third-best-known cryptocurrency in the United States after Bitcoin and Bitcoin Cash. Nevertheless, the majority of those surveyed had not yet heard of it. Progress and support for Ethereum in 2020 will depend heavily on the successful implementation of the Ethereum 2.0 Roadmap.
Litecoin (LTC)
Like Bitcoin, Litecoin began the first half of 2019 trading strongly. It rose from approximately $30 at the start of the year to nearly $150 in June, rising more than 375%. However, prices then declined sharply in the second half of 2019 falling from a high of $146.43 in June to a low of around $62 in August, according to figures from CoinMarketCap.
Litecoin’s network operates in a similar way to Bitcoin’s blockchain and is based on the mining process known as ‘proof of work’ being used to create new coins. It is sometimes referred to as being the digital silver to Bitcoin’s digital gold. Like Bitcoin, Litecoin’s network undergoes halving events that can affect the price. The Litecoin halving took place in August 2019 and profits rose ahead of the event as investors adjusted their strategies accordingly. After the halving event, rewards for mining are now 50% lower, which has led some miners to quit their involvement network, seeing it as being a less profitable enterprise. Litecoin’s creator Charlie Lee also expressed concerns that fewer people are interested in working on the technical development of the network which may also have damaged confidence in prospects for the cryptocurrency’s future.
In Jan 2020, LTC is trading at around $50, far lower than its past highs. However, it remains still one of the largest cryptocurrencies by market capitalization and the low price may present a good opportunity for new investors to enter the market.
Ripple (XRP)
Ripple tends to divide opinions in the cryptocurrency world. Some see it as a practical solution to settlement challenges facing the financial institutions, others criticize it for not being a ‘true’ decentralized cryptocurrency like Bitcoin or Ether.
In the first half of 2019, similar to other major cryptocurrencies, XRP prices performed relatively well but crashed in the second half of the year.
In terms of the wider marketplace, Ripple encountered some legal and regulatory hurdles. Parent company Ripple Labs formally requested a US federal court to dismiss a class-action lawsuit that alleged it illegally sold unregistered securities.
In more positive developments, Ripple Labs’ collaborative initiative gave a $250 million grant to a content monetization platform called Coil to assist it with fostering the adoption of XRP and the company also acquired an Icelandic cryptocurrency trading firm called Algrim. The new team is intended to work on the development of Ripple’s liquidity products.
Bitcoin Cash (BCH)
The Bitcoin Cash network matured in 2019 with a couple of technical upgrades to the network and increased adoption of the BCH cryptocurrency by users as well as merchants, particularly in Australia which even plans to build a dedicated tech park devoted to the cryptocurrency.
Bitcoin.com also announced the launch of a $200 million fund to promote the growth of the ecosystem and Local.Bitcoin.com launched a peer-to-peer marketplace which gives traders the ability to trade BCH privately, in a safe manner from any location worldwide. In September 2019, a Swiss fintech company announced a Bitcoin Cash exchange-traded product would be listed on the stock exchange, Six.
In terms of price movements, given its close relationship to Bitcoin, BCH’s market performance is never too far away from Bitcoin’s. And, like BTC, BCH performed well in the first half of 2019. On June 25, the price was $470 per coin on June 24, equivalent to a rise of 213%. However, Q3 was painful, as by the end of September, the coin was trading at $223–45% down from the start of Q3.
Proponents of Bitcoin Cash are aggressive about mass adoption and would like to see the cryptocurrency’s market capitalization rise higher up the rankings in 2020. As the Bitcoin price has recovered in 2020, BCH has followed suit and, perhaps more significantly, prices have recently surged in response to news that Craig Wright, the Australian cryptographer, and coder who controversially claims to be one of the creators of Bitcoin, had submitted court documents which suggest he has control of a trust which may hold a vast sum of BTC. This would also mean he owns a very large number of BCH (since the currency was created as a fork of the Bitcoin blockchain). As potentially one of the major BCH ‘whales’ — if not the BCH ‘whale’— his holdings and what he decides to do with them could have a major impact on the future price of BCH.
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